WHAT IS TECHNICAL ANALYSIS?
How to do technical analysis is a question asked by many people. Technical analysis is a thing for the stock and Forex market. Technical analysis is done so that it can be predicted that how to play the game of Forex trading in the future. With the technical analysis the future prices of sales, stocks, commodities, etc. Are predicted based on the past data. From the technical analysis, we can get the best trading strategies and prevent ourselves from the loss.
HOW TO DO TECHNICAL ANALYSIS?
Here are some steps which should be followed for learning how to do technical analysis. They are listed below–>
- Study Charles Henry Dow’s theory for technical analysis.
The Charles Henry Dow is the founder of the Wall Street Journal. He has given three theories for technical analysis. Their names are listed below–>
- All the known information is reflected by market fluctuations.
- We can do two things with price movements; it can be predicted and it can be charted.
- History always repeats itself.
- Search for quick results.
Technical analysis prefers short term investments over the long term. It focusses more on those who repeatedly purchases and sells in the market.
- Keep reading charts. For example, price charts, etc.
Price charts play an important role in knowing the future direction of the prices.
- Understand the theory of resistance and support.
Support means low-price security. On the other hand, resistance means high price security. Traders should know the basic concepts of both for security reasons.
- Give more attention to the trade’s volume.
The volume of trade represents the living time of the trade. Here living time means, for much longer, the trade is validated.
- Filter fluctuations in minor prices. This can be done by using moving averages.
For removing fluctuations, the trader needs to remove averages. Here, averages mean out liars.
- Understand the hints or information which is given by price movements. This can be done by using oscillators and indicators.
Indicators are some sort of calculations which provide information. A trader should also know the basic concept of indicators.
Learn the basics of Labrich Educational Packages and Trading Strategies by studying the historic events that have have shaped our world giving you a better understanding of trading and what drives volatility.